When applying for a loan, there is sometimes a need for a co-borrower to help the applicant increase his chances of obtaining the loan. But would the co-borrowers have to bear the full amount of the arrears in the event of a loan? This is a relatively common issue and will be analysed in this paper from a variety of perspectives, including law, contract, repayment。

Do co-borrowers have to bear all their arrears

First, let's look at the legal angle. Under the terms of our Contract Act, a co-borrower is required to pay the amount due unless it is expressly stated in the contract that it is not required. This means that if there is no agreement in the contract that the co-borrower will only have to bear part of the arrears, then the co-borrower will have to bear the full amount. In practice, however, banks rarely give full liability for arrears to co-borrowers, as banks know that this may put considerable economic pressure on co-borrowers. As a result, banks often determine the scope of liability on the basis of factors such as the credit position of borrowers and co-borrowers and the amount of the loan。

Secondly, let's look at the contractual angle. When signing a loan contract, the borrower and the co-borrower should carefully read the provisions of the contract regarding liability for arrears. If there is an agreement in the contract that the co-borrower must bear the full amount due, then the co-borrower will have to bear the full liability. However, this usually does not occur and the bank does not allow the co-borrower to bear the arrears indefinitely. Co-borrowers should therefore ensure that contractual engagements on the liability of co-borrowers are clear and that, where unreasonable terms exist, communication and feedback should be provided to banks in a timely manner。

Finally, let us take a look at the way in which we repay. If there is no express agreement in the borrowing contract on the liability of the co-borrower, the bank will normally require all borrowers to share the burden of repayment. That is, if a borrower is unable to pay on time, other borrowers will have to pay back. This is because, in the bank's view, all borrowers have the same obligation to repay. However, if the co-borrower is classified as a minor borrower in the borrowing contract, then its liability is relatively small. In such cases, the co-borrower would only have to bear part of the arrears, which would normally be smaller。